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McHenry council approves up to $20,000 TIF eligibility study after heated debate
Summary
The McHenry City Council authorized a professional-services agreement with Teska Associates for a tax-increment financing (TIF) eligibility study not to exceed $20,000. The motion passed 4–2 with one member absent after councilors debated the 'but-for' requirement and the size and purpose of proposed TIF districts.
The McHenry City Council on Oct. 20 authorized the mayor to sign a professional-services agreement with Teska Associates to complete a TIF eligibility study for proposed areas, in an amount not to exceed $20,000.
Council members split over whether the proposed TIF districts meet statutory eligibility tests and whether the city has a clear vision for the zones. "To me, again, chips are another way of taxing property taxes," said Alderman Glab. "It's not a lot of money per residence, but it all affects everybody's property taxes when you create a TIF." Alderman Bassi said the downtown TIF is no longer blighted and argued that "the 'but for' requirement" is not met because some building improvements are occurring without TIF financing.
The council heard from staff that the item is the first step in a multistage process: the study determines whether areas are eligible, and if eligible the council would later consider a redevelopment plan. A staff member confirmed, "This is just the first part. This is just to see if they're eligible." Alderman Doherty and others said they view the TIFs as tools to prompt redevelopment in underused corridors; Doherty said he "stand[s] by my vote the first time" that the districts are needed.
After discussion the council voted on the motion. Roll call on the item recorded Yes: Behney, Miller, Davis, Doherty; No: Bassi, Glab; Absent: Cook. The motion passed.
Why it matters: TIF designations shift property tax increments to redevelopment accounts and can materially affect local taxing bodies' revenues if areas remain TIF districts. The study will provide the data the council requested to determine eligibility and scope before any redevelopment plan or financing is proposed.
Next steps: Staff said the study is the eligibility phase; if Teska finds areas eligible the council would later see a redevelopment plan and ordinance for further consideration.
